Natural Gas:

Last week, U.S. EPA found that contaminant levels in the water in Dimock, Pa., showed no health threat and no connection to hydraulic fracturing chemicals. What is the broader significance of the finding to the national fracking discussion? During today's OnPoint, Peter Robertson, senior vice president for legislative and regulatory affairs at America's Natural Gas Alliance and a former chief of staff and deputy administrator at EPA, discusses the Dimock case and also talks about the potential for price fluctuations in the natural gas market.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Peter Robertson, senior vice president for Legislative and Regulatory Affairs at America's Natural Gas Alliance and a former chief of staff and deputy administrator at U.S. EPA. Peter, thanks for coming on the show.

Peter Robertson: Thanks for having me, Monica.

Monica Trauzzi: Peter, last week EPA found that contaminant levels in the water in Dimock, Pa., showed no health threat and no connection to fracking chemicals. What's the broader significance of this finding to the national discussion on fracking?

Peter Robertson: Well, first of all, Monica, we're obviously delighted that the people in Dimock can drink their water without fear. I think what we hope that this finding by the EPA will do is help inform some of the discussion about hydraulic fracturing and about natural gas production with facts instead of with fear. We think it's important to have an informed discussion about natural gas. Natural gas is one of the most important aspects of our energy future, but we want that discussion to be a fact-based, science-based discussion and we're hoping that the findings that EPA made in Dimock will help us do that.

Monica Trauzzi: What's your sense on the long-term expectations for these types of challenges to fracking? Are we talking about years or decades of challenges or do you see sort of a point in the dialogue when things may start to wean off?

Peter Robertson: Well, we're certainly hoping and believing that we're making progress all the time in educating people about the benefits of natural gas, the lower pollutant loadings because natural gas is a cleaner fuel, the economic advantages that natural gas is bringing. Shale gas is responsible for 600,000 jobs today. That will grow to 1.6 million jobs by 2035. And every household in America, because of the low price of natural gas, is going to have an additional $926 in disposable income for each of the next three years. And fracking is essential for us to have those advantages for us to be able to get the gas out of the ground. And we're finding that people have a better understanding of that all the time.

Monica Trauzzi: But there are many people who don't want this in their backyards. How do you sort of overcome those NIMBY issues?

Peter Robertson: Well, I think it's with a fact-based, science-based discussion. We do believe that there's been a lot of fear mongering out there, unfortunately, and it's sometimes easier to instill fear then it is to have a fact-based discussion. But we don't mind having that discussion because we're absolutely convinced that when people hear the facts and understand the facts, they'll understand that they don't have anything to fear from natural gas production.

Monica Trauzzi: So, right now natural gas is just over $3 per million BTU, and a recent article in Forbes predicted $8 natural gas by the end of the year. Are low prices built to last, and could just one catastrophic event sort of send the supply/demand chain into a tizzy?

Peter Robertson: Well, certainly the Energy Information Administration is predicting a continued, steady supply of low-cost natural gas for the foreseeable future. And we don't see any reason to think that that's likely not to be the case. You know, we're the greatest producer of natural gas in the world. In 2009 we exceeded Russia as the greatest producer of natural gas. And that abundance of natural gas is what's leading to the advantages that I mentioned to you.

Monica Trauzzi: AGA's Dave McCurdy recently said that $2.80 is not sustainable and that the challenge is not on the supply side, but on the demand side. What's the number then that your industry has in mind in terms of what's sustainable?

Peter Robertson: Well, you know, each shale play is different, Monica, so there isn't one number that I can give you that would -- that the industry can achieve and have economically sustainable production all across the country. Because the shale plays are different, it's going to be a different answer each place in the country.

Monica Trauzzi: But there does seem to be this push for those prices to go higher in order for the natural gas industry certainly to be on OK footing, but there are many in the manufacturing sector that rely on natural gas. Isn't that demand good for the natural gas industry overall?

Peter Robertson: Oh, it absolutely is and I think the concern that we hear most often expressed by the end users, especially in the industrial community for example, is that what concerns them most is the volatility in prices that we saw in natural gas in years past. The new abundance of natural gas, brought about by the technological advances like horizontal drilling and hydraulic fracturing, is really almost completely erasing that volatility if you look at government sources like the Energy Information Administration.

Monica Trauzzi: What do you think the overall impact would be on the U.S. economy if we actually saw prices continue to climb?

Peter Robertson: Well, the low prices of natural gas that we're experiencing now are providing advantages all across the country. I mentioned to you the increases in household income. The industrial sector is seeing growth because of the low prices of natural gas. And, again, we expect that to be able to continue because we don't expect to see volatility in the prices as we've seen in the past.

Monica Trauzzi: But if the price goes up, the economy could take a hit.

Peter Robertson: Well, certainly natural gas is an important feedstock chemical. It's an important power generation source, but we don't expect to see the types of dramatic increases that we would expect would have significant reverberations in the economy.

Monica Trauzzi: Let's talk about politics. Is there enough of a difference between the two presidential candidates on natural gas and fracking for it to become an issue this election cycle?

Peter Robertson: One of the great things about my job, Monica, is that natural gas enjoys such a bipartisan range of support in the Congress and between the two presidential candidates. The Obama administration has made clear that they believe natural gas is an important element of our energy future and the Romney campaign has said similar things. So, we're looking forward to working with leaders in the Congress of both parties, of working with the next president, whoever that is, to ensure that we have policies in place that will allow us to continue to develop this abundant, domestic, clean energy resource.

Monica Trauzzi: All right, we'll end it right there. Thank you for coming on the show.

Peter Robertson: Thank you for having me, Monica.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.